"Friendship can be lost in situations like these."

Eric Schurenberg is the president and editor-in-chief of Inc. Before joining Inc, Eric was the editor of CBS MoneyWatch.com and BNET.com and managing editor of Money Magazine. As a writer, he is a winner of a Loeb and a National Magazine Award.

00:18 Schurenberg: But every entrepreneur faces some dark days and you are no exception to that rule. What would you say were the worst days? So let me put it this way. Let me ask you about two things that must been very hard in the course of your career, and I'd like to get your reaction to them, how they played out, and what you learned from them. One is breaking up with Nik Powell, a co-founder and friend.

00:46 Branson: Yeah. I mean Nik was a tremendous partner at Virgin and I'd known him since I was two or three years old. We used to play together growing up. And I think there just came a time where the company had moved into areas which were not really of his interests. So the music world was something which didn't interest him enormously, and I just found myself leaning to different people more. So, Kenan, Simon, and others. And so there came a time where we decided to go our own ways. Fortunately, we've managed to remain friends through that and it can be quite difficult having friends working for companies if things don't work out, and friendships can be lost in situations like that. I've got... There was this one different occasion where I practically lost a friend who wasn't working out of Virgin. But I think that I wouldn't be afraid of bringing friends into companies, because I think the upsides of having friends working with you in the company outweighs the downsides.

02:18 Schurenberg: But you're certainly aware of the risks.

02:20 Branson: Yeah, I think you have to be aware of the risk, that it could cost you a friendship if it doesn't work out. But in my... My philosophy is that the company should be made up of a group of friends anyway, and so I don't think it's contradictory to take the risk of bringing friends into the company because hopefully everybody who's working in the company, you're friends anyway.

02:44 Schurenberg: The other dark day I meant to ask you about was the time that a Virgin Train train derailed and a passenger was killed. How did you handle that, and how did you get through it?

02:59 Branson: Well, I was actually in a cinema on a ski slope, and my phone wouldn't stop ringing, and after about 10 different rings, something alerted in my brain and I walked out and was told that the track, which Virgin actually isn't responsible for, but anyway, the track had broken on the West Coast Main Line and one of our trains, at full speed, had come off the track. And at that stage, there were one or two people hurt, nobody had actually been killed. But I felt very strongly that either I needed to get home fast, get to the scene of the accident, meet our staff and meet the people who were involved in the accident. And so, since all of the airports were closed, drove through the night and then to an airport that was open, got a small plane, arrived in Manchester very early the next morning. I went straight to the scene of the accident. And I think as anybody who runs a company, if there is an incident like that, it is absolutely essential that they drop everything, they go to the incident. And then... And so by 7 o'clock that morning, an elderly lady had died, and so I went to morgue and met her relatives and we had big hugs and tears together, and then went down to see the train and confronted the press, and saw the staff and so on. So, I think it's just something which you... It's very, very important that chairmen of companies, whether it's their fault or their company's fault or not, you deal with these things head on.